The market's direction brings out different points of view---as always

By Dian Vujovich

Like weather forecasters, those who predict the markets say all sorts of things with rare 100 percent accuracy. In two stories I read this morning, one from today’s iStockAnalyst’s newsletter and the other a columnist for Seeking Alpha, are two thought-out points of view that make my point.

What follows is a bit of both. Read each then do what all wise folk do—wait and see which one comes closer to hitting the mark.

From iStockAnalyst.com s issue 47 iOn the Market report:

“The S&P, NASDAQ and Dow are all at or within whispering distance of technical resistance that has repelled previous advances. These clear lines are awesome for investors as the markets’ response answers – with great clarity – the “what to do next question?”

“If buyers can convincingly push the Dow to a close above 10,700, the NASDAQ above Friday’s close of 2315, and the S&P on top of 1130, then the lid is going to blow off. The Dow and S&P could push up 3% in a flash. The NASDAQ has some catching up to do and could rise nearly 6%.

“Should current levels prove to be too stubborn and send bulls packing, the indexes’ 50 day-moving-averages are likely to be the initial downside target area. That would put the Dow at 10,370ish, the S&P near 1090 and the NASDAQ close to 2225 ”

“Yes, the bull run did start on the first day in September as expected and all major indexes have gained over 8% this month so far. We’ve made good profits during this two-week run. We bought Apple (AAPL) September 250 call options for $2.00 at the end of August and the call option traded as high as $27.95 last Friday. That’s almost a 1,300% return in less than three weeks. Actually, one would have had anywhere from 700% to over 1,000% gains if he/she had bought call options for Amazon (AMZN), Priceline (PCLN), Google (GOOG), etc. at that time.

“Why is it now a market top?

•All sentiment indicators give the same readings as they had when they reached their April highs.

• The recent rally is not broad based Only a handful of stocks are at yearly highs or have reached April’s high levels .. The economy does not support further gains.

•Even AAPL may have reached its top because Cramer pushed AAPL several times last week during his CNBC shows. That is to say: When Cramer says BUY BUY BUY, be very careful.

•Major indexes have several gaps made during the run that are waiting to be filled .. The latest gap may qualify as a bearish one .Of course, I do NOT know on which day the market may make a turn, but what I can say is, it is close .”